Series | Insights into investor processes
Why quality is more important than the number of investors when looking for investors
When companies start looking for investors, an obvious consideration often arises:
The more investors are approached, the higher the probability of financing.
At first glance, this logic seems plausible. After all, a larger number of potential investors also seems to mean more opportunities.
In practice, however, approaching investors works differently.
The decisive factor is not the number of investors, but the accuracy of the approach.
Investors are not a homogeneous group. Each investor pursues its own strategy and only invests under certain conditions. These include
– sector focus
– ticket sizes
– development phase of a company
– investment models
– geographical markets.
If these factors do not match the company, there will be no real interest in investing – regardless of how convincingly a company is presented.
A successful investor process therefore begins with another question:
Which investors really suit the company?
In practice, this initially means a systematic analysis of potential investors. Suitable investors are identified, evaluated and brought together in a qualified longlist.
Only then does the targeted approach begin.
This step changes the entire process.
A random search for investors becomes a systematically managed approach to investors.
It is precisely this phase that is crucial in our consulting services. Before investors are approached, we first analyze which investor strategies actually suit the company – and where realistic investment interest can arise.
Successful investor processes are therefore not the result of as many contacts as possible, but of a precise selection of suitable investors.
However, it takes more than experience and a network to make this selection systematically.